Gagan v. Yast
966 N.E.2d 177
| Ind. Ct. App. | 2012Background
- Gagan founded DirectBuy with Deutsch, Wittlinger, and Allen; Yast later became DirectBuy's vice president and general counsel and also represented ThinkTank at times.
- In 2007 the sellers sold DirectBuy to Trivest; Yast was not a shareholder but had a financial interest via DirectBuy stock purchases by himself and others.
- After a $75 million dividend issue and a dispute over $17 million in member merchandise money, Yast believed the withdrawal violated DirectBuy’s practices and merger terms and advised disclosure of a potential conflict of interest.
- Yast sent letters in March–April 2008 to Gagan and Jamie detailing his conflict and withdrew from ThinkTank litigation and later from Gagan’s federal litigation.
- Gagan sued Yast for defamation in December 2008 for alleged false statements; discovery produced no witnesses reporting Yast making derogatory statements about the sellers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether qualified privilege protected Yast's disclosure to Jamie | Gagan argues privilege does not apply due to malice or improper purpose. | Yast contends he acted under common interest/duty and disclosed due to ethical obligation under Rule 1.7. | Yes; qualified privilege applies and disclosure is protected. |
| Whether Yast abused the privilege | Gagan asserts ill will or improper motive existed to manipulate ThinkTank. | Yast asserts no ill will; disclosures were proper disclosures of conflict and withdrawal. | No abuse; no evidence of ill will or improper publication. |
| Whether there is evidence of actual malice or lack of belief in truth | Gagan contends statements were made without belief in their truth or with malice. | Yast believed in the conflict and acted in good faith; there is evidence supporting belief in the statements' truth. | No; evidence supports good faith belief and truthfulness of statements. |
Key Cases Cited
- Schrader v. Eli Lilly & Co., 639 N.E.2d 258 (Ind. 1994) (common interest qualified privilege applies to communications with a corresponding duty)
- Dugan v. Mittal Steel USA Inc., 929 N.E.2d 184 (Ind. 2010) (internal communications within an employer context uphold qualified privilege)
- Conwell v. Beatty, 667 N.E.2d 768 (Ind. Ct. App. 1996) (common interest privilege when there is a duty to communicate)
- Holcomb v. Walter's Dimmick Petroleum, Inc., 858 N.E.2d 103 (Ind. 2006) (ill will standard for abuse of privilege requires scope of privilege to be exceeded)
- Williams v. Tharp, 914 N.E.2d 756 (Ind. 2009) (absence of malice and proper purpose supports non-abuse finding)
- Bals v. Verduzco, 600 N.E.2d 1353 (Ind. 1992) (abuse requires proof of ill will, excessive publication, or lack of belief in truth)
- Rosi v. Business Furniture Corp., 615 N.E.2d 431 (Ind. 1993) (summary judgment standard in defamation based on privilege)